January 19, 2023
2023 Legal Update for California Employers

EAC Update
provided by
Scott & Whitehead


Legislative UpdatesThe following is a summary of the primary State legislative actions impacting California employers, each of which will take effect January 1, 2023 except as otherwise stated. Please note, these descriptions are summaries only, and are not intended to provide a complete description of each new law. Please contact our office if you have any questions.


AB 1949: Bereavement Leave (amends Sections 12945.21 and 19859.3 of, and adds Section 12945.7 to, the Government Code).

It will be an unlawful employment practice for an employer to refuse to grant a request from an eligible employee, one who has been employed for at least 30 days, to take up to five days of bereavement leave upon the death of a family member. “Family Member” means a spouse or a child, parent, sibling, grandparent, grandchild, domestic partner, or parent-in-law.

Bereavement leave must be completed within three months of the date of death. In the absence of an existing policy, the bereavement leave may be unpaid. An employee is authorized to use certain other leave balances otherwise available to the employee, including accrued and available paid sick leave, to cover bereavement. Previously, paid sick leave benefits could not be used for bereavement leave.

The employer must maintain employee confidentiality relating to bereavement leave. The law does not apply to an employee who is covered by a valid collective bargaining agreement that provides for bereavement leave.


AB 1041: Designated Persons for CFRA Family Caregiver Leave and Paid Sick Leave (amends Section 12945.2 of the Government Code and Section 245.5 of the Labor Code).

Persons for whom an employee may take CFRA Family Caregiver leave in order to provide care is expanded to include a “designated person,” which means any individual related by blood or whose association with the employee is equivalent of a family relationship. A designated person can be identified at the time the employee requests the leave. An employer can limit an employee to one designated person per 12-month period.

Under California’s Paid Sick Leave Law (PSL), the term “family member” for whom an employee may use sick leave benefits in order to provide care will now include a “designated person,” which means any person identified by the employee at the time the employee requests paid sick leave.


AB 2188: Off-the-Job Cannabis Use Protection (adds Section 12954 to the Government Code).

Effective January 1, 2024, one year from now, it will be unlawful for an employer to discriminate against a person in hiring, termination, or any term or condition of employment, or otherwise penalize a person, based upon the person’s use of cannabis off the job and away from the workplace. When it becomes effective, the law will exempt certain applicants and employees from the law’s protections, including employees in the building and construction trades and applicants and employees in positions requiring a federal background investigation or clearance. The law will not preempt state or federal laws requiring applicants or employees to be tested for controlled substances as a condition of employment, in order to receive federal funding or federal licensing related benefits, or to enter into a federal contract.

This new law will not interfere with employers maintaining a drug-free workplace. Employers are within their rights to stop their workers from possession of, being impaired by, or using cannabis at work.


SB 1044: Emergency Conditions – Prohibition of Adverse Employment Actions (adds Chapter 11 (commencing with Section 1139) to Part 3 of Division 2 of the Labor Code).

In the event of an “emergency condition,” employers are prohibited from taking or threatening adverse action against any employee for refusing to report to, or leaving, a workplace or worksite within the affected area because the employee has a reasonable belief that the workplace or worksite is unsafe. An “emergency condition” means either conditions of disaster or extreme peril to the safety of persons or property at the workplace or worksite caused by natural forces or a criminal act, or an order to evacuate a workplace, a worksite, a worker’s home, or the school of a worker’s child due to natural disaster or a criminal act. “Emergency condition” does not include a health pandemic. These provisions do not apply when emergency conditions have ceased.


SB 1126: CalSavers Retirement Savings (amends Sections 100000 and 100032 of the Government Code).

Existing law requires eligible employers to offer a payroll deposit retirement savings arrangement so that eligible employees may contribute a portion of their salary or wages to a retirement savings program account in the program.

The definition of “eligible employer” is expanded to include a person or entity that has at least one eligible employee and that satisfies the requirements to establish or participate in a payroll deposit retirement savings arrangement, and would additionally exclude from the definition of “eligible employer” sole proprietorships, self-employed individuals, or other business entities that do not employ any individuals other than the owners of the business.

Eligible employers with five or more employees that do not offer a retirement savings program must adopt a payroll deposit savings arrangement to allow employee participation in the program. Employers with 1 to 4 employees may choose to do so at this time, and will be required to do so by December 31, 2025.


AB 1632: Restroom Access (Article 6 (commencing with Section 118700) is added to Chapter 2 of Part 15 of Division 104 of the Health and Safety Code).

A place of business that is open to the general public for the sale of goods and that has a toilet facility for its employees must allow any individual who is lawfully on the premises of that place of business to use that toilet facility during normal business hours, even if the place of business does not normally make the employee toilet facility available to the general public IF that individual has an eligible medical condition or uses an ostomy device AND a public restroom is not immediately accessible to the individual ANDproviding access would not create an obvious health or safety risk to the individual or an obvious security risk to the place of business. An “eligible medical condition” includes Crohn’s disease, ulcerative colitis, other inflammatory bowel disease, irritable bowel syndrome, or another medical condition that requires immediate access to a toilet facility.

The place of business may require the individual to present reasonable evidence of an eligible medical condition or use of an ostomy device, such as a signed statement by a licensed physician, nurse practitioner, or physician assistant.


AB 1601: Call Centers (amends Labor Code Sections 1400, 1406 and adds related Labor Code Articles).

Under this new law, the Labor Commissioner is authorized to enforce certain notice requirements concerning a mass layoff, relocation, or termination of call center employees from a “covered establishment,” which includes an entity that has employed 75 or more persons within the preceding 12 months. In addition, a covered establishment may not order a relocation of its call center, or one or more of its facilities or operating units within a call center, unless notice of the relocation is provided to the affected employees, the Employment Development Department, and other governmental agencies as specified.


AB 257: Fast Food Accountability and Standards Recovery Act (or FAST Recovery Act) (amends Section 96 of, and adds Part 4.5.5 (commencing with Section 1470) to Division 2 of, the Labor Code).

This new law established the “Fast Food Council,” which will set minimum standards on wages, working hours, and other working conditions related to the health, safety, and welfare of, and supplying the necessary cost of proper living to, fast food restaurant workers. Covered employers are part of fast food chains with 100+ nationwide locations.

Standards established by the Fast Food Council will not be applicable to fast food employees subject to a collective bargaining agreement.


SB 523: FEHA, Reproductive Health Decision-Making (amends Sections 12920, 12921, 12926, 12931, 12940, 12944, and 12993 of, and adds Sections 22853.3 and 22853.4 to, the Government Code, amends Sections 1343 and 1367.25 of, and adds Sections 1367.255 and 1367.33 to, the Health and Safety Code, amends Section 10123.196 of, and adds Sections 10123.1945 and 10127.09 to, the Insurance Code, and adds Sections 10509.5 and 10828 to the Public Contract Code, relating to reproductive health).

Specified discriminatory practices, by employers, labor organizations, apprenticeships, training programs, and licensing boards based on reproductive health decision-making, are now unlawful. It will also be unlawful for an employer to require, as a condition of employment, continued employment, or a benefit of employment, the disclosure of information relating to an applicant’s or employee’s reproductive health decision-making.


SB 1162: Pay Data Reporting (amends Section 12999 of the Government Code and Section 432.3 of the Labor Code).

Existing law requires private employers with 100 or more employees to file an annual pay data report (EEO-1) with the EEOC by March 31st each year. Under the new law, private employers with 100 or more employees must submit an annual pay data report to the Civil Rights Department on or before the second Wednesday of May each year. A private employer that has 100 or more employees hired through labor contractors must also submit a separate pay data report to the Department for those employees, in which case the labor contractor must provide the pay data to the employer.

The pay data reports must include the median and mean hourly rate for each combination of race, ethnicity, and sex within each job category. A court may impose a civil penalty not to exceed $100 per employee upon any employer who fails to file the required report, and not to exceed $200 per employee upon any employer for a subsequent failure to file the required report.


SB 1162: Pay Scale Disclosures and Record Retention (amends Section 12999 of the Government Code and Section 432.3 of the Labor Code).

Existing law requires an employer, upon reasonable request, to provide the pay scale for a position to an applicant applying for employment. Pay scale means salary or hourly wage range.

Under the new law, an employer, upon request, must provide an employee the pay scale for the position in which the employee is currently employed. In addition, an employer with 15 or more employees must include the pay scale for a position in any job posting. Penalties range between $100 and $10,000 per violation.

Employers must maintain records of job title and wage rate history for each employee during, and for three years following the employee’s separation from, employment.


The City of Los Angeles’ Fair Work Week Ordinance.

Effective April 1, 2023, certain retail employers in the City of Los Angeles will be required to provide employees at least 14 days’ advance notice of their work schedules and to compensate employees in the event of certain schedule changes. Cities such as San Francisco, San Jose and Emeryville have similar ordinances.

Retail businesses include establishments that are primarily engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. Retail businesses with 300 or more employees globally are subject to the Ordinance. Workers engaged through temporary services or staffing agencies count toward the 300 global employee threshold. Employees who qualify for minimum wage and perform at least two hours of work in a workweek in the City of Los Angeles are covered by the Ordinance.

Among other things, workers must be provided with a good faith estimate of their work schedules before hiring and within 10 days of a current employee’s request; significant deviations from the good faith estimate must be justified by an employer’s documented, legitimate business reason that was unknown when the good faith estimate was given to the worker; and employers must compensate employees with “predictability pay” for some schedule changes or canceled shifts. Covered retail business with employees who work in the City of Los Angeles may contact our office for additional information.


California Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA).

The CCPA, signed into law in 2018, created a large number of consumer privacy rights and business obligations regarding the collection and sale of personal information. The CPRA, Proposition 24, was a ballot measure approved by California voters in 2020. Significant provisions of the CCPA and CPRA will become effective on January 1, 2023.

The CCPA imposes obligations on businesses, service providers, contractors, and third parties. A “business” is defined as a for-profit legal entity that does business in California, collects consumers’ personal information on its own or by others on its behalf, and satisfies at least one of the following thresholds:

  1. Has annual gross revenues in excess of $25 million;
  2. Annually buys, receives, sells, or shares the personal information of 50,000 or more consumers, households, or devices; or
  3. Derives 50% of more of its annual revenues from selling consumers’ personal information.

A business, as defined, must do all the following:

  1. Give notice of consumer rights;
  2. Honor consumer rights;
  3. Comply with disclosure and retention obligations;
  4. Facilitate consumer requests; and
  5. Implement security safeguards.

Consumers, defined to include all California residents, are afforded these rights:

  1. The right to request disclosure of personal information collected by the business about the consumer;
  2. The right to delete personal information collected from the consumer;
  3. The right to opt-out of the sale of personal information;
  4. The right to non-discriminatory treatment for exercising any rights;
  5. The right to initiate a private cause of action for data breaches;
  6. The right to correct inaccurate personal information; and
  7. The right to limit use and disclosure of sensitive personal information.

This is a complicated privacy/data protection statute that will not apply to many of our clients. If this law may apply to your business, and if we can assist you in its navigation, please let us know.


SB 189: DFEH Renamed Civil Rights Department.

The California Civil Rights Department is the new name for the former Department of Fair Employment and Housing. The Fair Employment and Housing Council is now known as the California Civil Rights Council.


AB 676: Franchisor Discrimination (amends multiple Business and Professions Code and Corporations Code provisions).

This law prohibits a franchisor from refusing to grant a franchise or refusing to provide financial assistance to a franchisee or prospective franchisee based solely on characteristics protected under the Unruh Civil Rights Act. Those include sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation, citizenship, primary language, or immigration status.




California Hourly Minimum Wage and Exempt Salary Minimum: Effective as of January 1, 2023, the state minimum wage will move up to $15.50 per hour regardless of the number of employees working for the employer. Notably, it was previously announced that minimum wage would increase to $15.00 per hour, which has been superseded by the $15.50 rate.

The new minimum wage raises the minimum salary required to qualify for exempt status to $1,240 per week, $5,374 per month or $64,480 per year. Again, this supersedes the previously announced minimum salary requirement of $1,200 per week, $5,200 per month and $64,000 per year, which are no longer applicable.

Local ordinances, such as those that apply to employees who are in at least 16 California cities, including San Francisco, Los Angeles and Santa Monica, mandate a higher minimum wage with scheduled changes that took effect as of July 1, 2022. Please note, the minimum salary requirement for exempt status does not change based on local ordinances.


IRS Standard Mileage Rate: Each year, the IRS adjusts the IRS Standard Mileage Rate for business travel. In recognition of dramatic gasoline price increases, the IRS made a special adjustment for the final six months of 2022. Effective July 1, 2022, the standard mileage rate for business travel reimbursement increased to 62.5 cents per mile, up 4 cents from the prior rate effective at the start of 2022. For 2023, the rate continues at 62.5 cents per mile.

Reimbursement at the IRS Standard Mileage Rate is presumed by law to constitute payment in full for the business use of an employee’s personal vehicle (including fuel, insurance, maintenance, repairs, etc.). Therefore, employers are advised to always reimburse employees at this rate (or more, but not less) for all business-related mileage driven in the employee’s personal vehicle.


Computer Software Professionals Minimum Pay for Overtime Exemption: Effective January 1, 2023, the minimum hourly pay rate for exemption from overtime for certain categories of computer software professionals will increase to $53.80, up from $50.00. The minimum monthly salary exemption moves from 2022’s $8,679.16 to $9,338.78, and the minimum annual salary exemption increases from $104,149.81 to $112,065.20.


Licensed Physicians and Surgeons Minimum Pay for Overtime Exemption: Effective January 1, 2023, the minimum pay rate for exemption from overtime for licensed physicians and surgeons will increase from $91.07 per hour to $97.99.


Arbitration Agreements: Employers and employees may elect to resolve their disputes by arbitration. The law surrounding the construction and use of arbitration agreements changes constantly. To keep up with changes in laws and court decisions, prudent employers have their arbitration agreements reviewed and updated regularly.